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OECD: Australia A Standout Economy

The OECD’s latest economic survey says Australia’s 21 years of uninterrupted growth “stands out among OECD countries”.

The Organisation for Economic Co-operation and Development, an organisation representing 34 of the world’s richest and most developed countries, says Australia’s growth performance “has been sustained by sound policies” and the Asian commodities boom.

The OECD says the main challenge for Australian economic policy is “to manage a sustained recovery, while promoting important structural changes in the economy.”

OECD reports are usually written with input from the Treasury. Amongst the report’s policy recommendations, it says: “The current shift in the policy mix is appropriate. If the cycle weakens, ease monetary policy and let the automatic stabilisers work. Whilst monetary policy should be the first line of defence, if a full-scale global crisis of similar magnitude as in 2008-09 erupts, be ready to adopt prompt fiscal expansion.”

The report also urges a reduction in company tax and a broadening of the mineral resource rent tax (MMRT).

The Secretary General of the OECD, Jose Angel Gurria, described Australia as the “iron man” of the OECD. He was interviewed by ABC News24’s Scott Bevan:

Text of a media release from Treasurer Wayne Swan.

OECD survey shows Australian economy a standout

The OECD’s latest economic survey of Australia released today shows once again that our economy stands tall amongst its peers, with 21 consecutive years of growth, robust economic fundamentals and a positive outlook in the face of acute global challenges.

The OECD finds that, unlike many developed economies, the Australian economy remains resilient, with successful macroeconomic management contributing to solid growth, low unemployment, contained inflation, and strong public finances.

The OECD commends the Government’s “exemplary handling of the global economic and financial crisis” avoiding recession in 2008-09.

Although the OECD notes our economy is not immune from risks in the global economy, the survey notes that “[t]he current monetary and fiscal policy mix is appropriate to sustain recovery, and Australia is in a good position to respond to risks.”

The report also highlights that the Government’s fiscal consolidation is part of a rebalancing of policy which “implies less pressure on interest and exchange rates, thereby alleviating adjustment difficulties for the exposed non-mining sector.”

While we understand that not everyone is doing it easy, this OECD report today is another reminder that Australians have a lot to be proud of and confident about.

The OECD welcomes the Government’s policies to improve environmental outcomes, noting that the Government’s Clean Energy Legislative Package marks a “decisive step forward in Australia’s policy on climate change”.

The report also welcomes many of the structural savings measures that the Government has introduced, noting that “several savings measures have been introduced that will steadily build over time, providing ongoing improvements to the budget position”.

The OECD report highlights the huge opportunities that the continued development of our region offers for Australia, and commends the Government’s plans for all Australians to benefit from this Asian Century.

To make the most of these opportunities, the Government is committed to boosting productivity by investing in the five pillars of productivity – skills and education, innovation, infrastructure, tax and regulation – as set out in the Australia in the Asian Century White Paper.

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